SBP to supply unlimited dollars to open market in order to strengthen exchange rates

SBP to supply unlimited dollars to open market in order to strengthen exchange rates

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KARACHI: State Bank of Pakistan Governor Tariq Bajwa and Adviser to the Prime Minister on Finance, Revenue and Economic Affairs Miftah Ismail affirmed currency traders for their support to bring down dollar rates in the open market, said currency dealers on Thursday.

The recent steady increase in dollar prices appeared as a hovering issue for the economic managers as well as for importers who buy dollars from open markets.

The exchange rate in banking market remained steady apparently because of strict observance and management by the central bank.

“We were assured by the governor SBP as well Mr Miftah Ismail to provide dollars for strengthening of exchange rate in the open market,” said Malik Bostan, President Forex Association of Pakistan (FAP).

A meeting of representatives of exchange companies with the State Bank was held on Thursday where the issue was discussed and a strategy was devised in order to bring down the dollar rates.

Earlier, in such a situation, the State Bank bailed out the currency market and supplied unlimited dollars to exchange companies resulting in the fall of the dollar demand and prices.

Both the representative bodies of exchange companies; FAP and Exchange Companies Association of Pakistan (ECAP) reported the dollar price as Rs18.20 and Rs18.70 as buying and selling rates respectively on Thursday.

“The central bank is keen to see the dollar down within days. I believe the dollar supply from SBP would surely depreciate dollar against Pak rupee,” said Secretary General of ECAP Zafar Paracha.

Reserves fall by half a billion dollars: The foreign exchange reserves of the State Bank drastically fell by $463 million within a week ended on April 20, 2018.

The reserves of the State Bank have been depreciating while the current account deficit has been ever increasing as it reached $12 billion at the end of third quarter.

The holdings of the SBP fell to $10.917 billion while the overall reserves of the country stood at $17.130 billion. The holdings of the commercial banks were $6.213 billion.

 

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